Can I Write Off Mileage For DoorDash? Your Complete Guide to Deductions

DoorDash drivers, or Dashers as they’re affectionately known, face a unique set of challenges and opportunities. One of the biggest opportunities? Taking advantage of tax deductions to minimize your tax liability. And one of the most significant, and often misunderstood, deductions available is for mileage. This article will break down everything you need to know about deducting mileage for DoorDash, helping you keep more of your hard-earned money.

Understanding the Basics: Why Mileage Matters for DoorDash Drivers

As an independent contractor, you’re responsible for paying your own self-employment taxes, which include both Social Security and Medicare taxes. This can significantly increase your tax burden compared to a W-2 employee. Thankfully, the IRS allows you to deduct certain business expenses to offset your taxable income, and mileage is often the largest single deduction available to Dashers.

Think of it this way: every mile you drive for DoorDash is a mile you’re using your personal vehicle for business purposes. This wear and tear, along with fuel costs, maintenance, and other vehicle-related expenses, can be partially recovered through mileage deductions.

The Two Methods: Choosing the Right Mileage Deduction Approach

The IRS offers two primary methods for deducting vehicle expenses: the standard mileage method and the actual expense method. Choosing the right method for you is crucial.

The Standard Mileage Method: Simplicity and Ease

The standard mileage method is the easier of the two. It involves tracking the miles you drive for business purposes and multiplying those miles by the IRS-established mileage rate for the tax year. This rate changes annually and is designed to cover the costs of operating your vehicle, including depreciation, fuel, repairs, and insurance.

Pros:

  • Simplicity: Requires minimal record-keeping beyond tracking your miles.
  • Easy to Calculate: Simple multiplication is all it takes.
  • Often More Advantageous: For many Dashers, the standard mileage deduction results in a larger deduction than the actual expense method.

Cons:

  • Limited Coverage: You can’t also deduct actual expenses like gas, repairs, and insurance when using the standard mileage method.
  • Depreciation: You cannot use the standard mileage method if you’ve previously used accelerated depreciation on your vehicle.

The Actual Expense Method: Detailed Record-Keeping, Potential for Higher Deductions

The actual expense method requires you to track all vehicle-related expenses throughout the year, including:

  • Gas
  • Oil changes
  • Tires
  • Repairs
  • Insurance
  • Registration fees
  • Depreciation (or lease payments)

You then calculate the percentage of your vehicle’s use that was for business purposes and deduct that percentage of your total vehicle expenses. For example, if 70% of your driving was for DoorDash, you can deduct 70% of your total vehicle expenses.

Pros:

  • Potentially Higher Deductions: If your actual vehicle expenses are high, this method can result in a larger deduction.
  • More Control: You have a detailed understanding of your vehicle-related costs.

Cons:

  • Complex Record-Keeping: Requires meticulous tracking of all expenses and mileage.
  • More Time-Consuming: Calculating the deduction is more complex.
  • Depreciation Calculation: Calculating depreciation can be complicated.

Tracking Your Miles: Essential for Both Deduction Methods

No matter which method you choose, accurate mileage tracking is absolutely crucial. The IRS requires you to maintain detailed records to support your deductions.

What to Track: The Essentials for Mileage Documentation

Here’s what you need to record for each business trip:

  • Date: The date of the trip.
  • Starting and Ending Locations: Where you started and ended the trip.
  • Odometer Readings: Your odometer reading at the beginning and end of the trip.
  • Total Miles Driven: The difference between the starting and ending odometer readings.
  • Business Purpose: A brief description of the trip’s purpose (e.g., “Pick up order from Restaurant X,” “Deliver order to Customer Y”).

Tools of the Trade: Apps and Methods for Efficient Mileage Tracking

Thankfully, there are numerous tools to make mileage tracking easier. Here are some popular options:

  • Mileage Tracking Apps: Apps like MileIQ, Everlance, and TripLog automatically track your mileage using your phone’s GPS. They can also categorize your trips as business or personal.
  • Spreadsheets: A simple spreadsheet can be a cost-effective way to track your mileage, especially if you’re comfortable with manual entry.
  • Physical Logbooks: A good old-fashioned notebook can work, but it’s more prone to errors and less efficient.

Pro Tip: Always start tracking your mileage from the moment you leave your home to start a DoorDash shift until you return home.

Maximizing Your Mileage Deduction: Tips and Strategies

Beyond simply tracking your miles, here are some strategies to maximize your mileage deduction:

  • Track Every Trip: Don’t miss any trips! Even short trips to pick up a single order add up.
  • Include Travel Between Orders: Mileage from your home to the first pickup, between deliveries, and back home at the end of your shift is deductible.
  • Factor in Deadhead Miles: “Deadhead” miles are those driven without a paying passenger or delivery. These are still deductible.
  • Maintain Detailed Records: Keep all your records organized and readily available in case of an audit.
  • Consult with a Tax Professional: A tax professional can help you choose the best method for your situation and ensure you’re claiming all eligible deductions.

Understanding What’s Not Deductible: Avoiding Common Mistakes

While mileage is a significant deduction, it’s important to understand what you can’t deduct:

  • Commuting Miles: The miles you drive from your home to your usual place of business (e.g., your first pickup location) and back home are generally considered commuting and are not deductible. However, the miles driven to your first pickup after you have logged into the DoorDash app are deductible.
  • Personal Miles: Any miles driven for personal errands or activities are not deductible.
  • Tickets and Fines: Traffic tickets and parking fines are not deductible.
  • Depreciation if Using Standard Mileage Method: If you choose the standard mileage method, depreciation is already factored into the mileage rate, so you cannot deduct it separately.

The Audit Factor: Preparing for a Potential IRS Review

The IRS may audit your tax return, and it’s crucial to be prepared. Having thorough and accurate records is your best defense.

  • Keep Records for at Least Three Years: The IRS generally has three years from the date you filed your return to conduct an audit.
  • Organize Your Documents: Keep all your mileage logs, receipts, and other supporting documentation in a well-organized manner.
  • Be Honest and Transparent: Always be truthful and forthcoming with the IRS.
  • Consider Professional Help: If you’re audited, consider hiring a tax professional to represent you.

Frequently Asked Questions

What happens if I forget to track my mileage for a few days?

While it’s best to track every mile, if you miss a few days, estimate your mileage based on your usual driving patterns. However, be prepared to justify your estimates if questioned.

Can I deduct mileage for driving to a restaurant to pick up a personal meal?

No. Mileage for personal errands, even if you’re near a delivery location, is not deductible.

Is there a limit to how much mileage I can deduct?

No, there’s no specific limit on the total mileage you can deduct. However, the IRS may scrutinize unusually high mileage claims. The key is to ensure your mileage aligns with your DoorDash activity.

Can I deduct mileage if I use a shared car for DoorDash?

Yes, you can still deduct the business use portion of the mileage. This is determined by the percentage of time the car is used for business.

Do I need to keep all my DoorDash earnings records to support my mileage deduction?

While not directly related to mileage, keeping your DoorDash earnings records is essential for reporting your income and calculating your self-employment tax. They support your overall business activity, which, in turn, supports your mileage claims.

Conclusion: Taking Control of Your DoorDash Finances

Deducting mileage is a powerful tool for DoorDash drivers to lower their tax liability. By understanding the different methods, tracking your miles meticulously, and keeping accurate records, you can maximize your deductions and keep more of your hard-earned money. Remember to choose the method that best suits your situation, and always consult with a tax professional if you have any questions or need personalized advice. By taking control of your finances, you can make your DoorDash gig even more rewarding.